Episode summary
Fed Served With DOJ Subpoenas; Iran Says Protests Quelled After Hundreds Reported Killed |...
Bloomberg Daybreak: US Edition
· · 21 min
Summary
The day’s main market story is the Trump administration’s latest escalation against the Federal Reserve. Jerome Powell said the Fed has been served grand jury subpoenas from the Justice Department over his June testimony about headquarters renovations, and he cast the move as part of broader pressure on Fed independence. The administration has also intensified scrutiny of the Fed through the Lisa Cook case, prompting criticism from Elizabeth Warren and resistance from Republican Senator Tom Tillis, while markets reacted with a weaker dollar, falling Treasuries, lower US equity futures, and higher gold and silver.
The program also focused on geopolitical risk. Iran’s foreign minister said security forces had “full control” after two weeks of unrest, while activists said at least 540 people had been killed. Trump said he was considering “very strong options,” including military action, even as communications inside Iran remain largely cut off.
Separately, the show covered renewed tensions over Greenland, with Denmark and Greenland’s top diplomats set to meet Marco Rubio in Washington, and reports that European countries are discussing a military presence there. The broadcast also flagged a busy week for bank earnings, pressure on credit-card lenders after Trump’s call for 10% interest-rate caps, and a looming nurses strike in New York City.
Key takeaways
- Powell said the DOJ subpoenas threaten a criminal indictment and framed them as part of an effort to undermine Fed independence.
- Markets sold off on the Fed news, with the dollar, Treasuries, and US equity futures sliding while gold and silver hit record highs.
- Trump said he is considering military options on Iran as activists reported at least 540 deaths in the protests.
- Denmark is hoping talks with Marco Rubio can help defuse Trump’s renewed push for control of Greenland.
- The week’s bank earnings from JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo will show how Wall Street handled trade wars and geopolitical tension.
Notable quotes
“This unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure”
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president”
“We're looking at it very seriously. The military is looking at it and uh we're looking at some very strong options”
“Look, if we don't take Greenland, Russia or China will, and I'm not letting that happen”
“Our setup is a positive for Tuesday kickoff”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. — Good morning. I'm Nathan Hager. — And I'm Karen Moscow. Here are the stories we're following today. — Karen, we begin with an escalation in the feud between President Donald Trump and Fed Chair Jay Powell. This time, the Justice Department is involved. Bloomberg's John Tucker joins us with the very latest. John.
And Nathan. Federal Reserve Chair Jerome Pal says the US central bank has been served grand jury subpoenas from the Justice Department threatening a criminal indictment. Pal made the announcement in an extraordinary video statement released last night. — This unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.
The Trump administration last summer ramped up scrutiny of the Fed's renovation of two buildings and rising costs associated with the projects. But Pal says this is just pretext to end Fed independence. — The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president.
In an interview with NBC News on Sunday, President Trump denied having any knowledge of the DOJ's investigation into the central bank. The president has repeatedly called for aggressive rate cuts and has repeatedly mused about firing Pal. At the end of last year, Trump said he was considering what he called a gross incompetence lawsuit against Pal.
In another extraordinary step, he sought to fire Fed Governor Lisa Cook. Well, the Supreme Court is set to take up the Cook case later this month in New York. I'm John Tucker, Bloomberg Radio.
All right, John, thank you. Well, Bloomberg News has learned Federal Housing Finance Agency Director Bill PE was a driving force behind the Trump administration's decision to subpoena the Federal Reserve.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed subpoenas
- trump doj
- iran protests
- greenland talks
- iran currency collapse
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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